Kazakhstan: August Newsletter Of Associated Office Of GRATA International In Belarus (Minsk) Arzinger&Partners

We present to your attention the last summer release of our Newsletter. We as always tried to provide you with the most interesting news of Belarusian legislation for the last month. In particular, you may learn about development of investment legislation and legislation on public-private partnership, plans of the Government for support of export in the next years, other news which, we hope, you will find interesting.

Note: Since August 17 the refunding rate of the National bank of the Republic of Belarus has been reduced to 18% per annum. Since September 1 legal entities and individual entrepreneurs perform obligatory sale of foreign currency in the domestic foreign exchange market in the amount of 20 percent of the amount of revenue in foreign currency.

PROCEDURE OF CONCLUSION, AMENDING AND TERMINATION OF INVESTMENT AGREEMENTS

Sergey Mashonsky
Senior Partner

On July 28 the Resolution of the Council of Ministers No. 563 came into force in the Republic of Belarus . This document establishes a new procedure of conclusion, amending and termination of investment agreements and provides the following updates.

Requirements to investors

Now the investor who intends to conclude an investment agreement with the Republic of Belarus and is going to use privileges provided by the Decree No. 10 will be obliged to enclose to application, in addition, copies of the documents containing assessment of financial state of the investor namely:

  • an audit opinion (for legal entities – residents of Belarus), or
  • the report by results of carrying out of a financial Due Diligence, or
  • an audit opinion of the international standard ISA 700 with a translation into Belarusian or Russian (for legal entities – nonresidents of the Republic of Belarus, foreign companies which aren't legal entities).

The accounting period for these documents constitutes, as a general rule, two years prior to registration of an application on conclusion of investment agreement with the Republic of Belarus. For investor (investors) existing less than two years reporting period is a period of activity.

Besides, the investor needs to attach copies of the documents confirming his capability to invest in the declared amount, including:

  • bank balance statement on the bank account or
  • letters of banks and (or)
  • other documents (in case of their availability) confirming intentions of creditors (banks), other persons to provide assets for performance of an investment project by means of credits, loans, with indication of approximate amounts of assets and conditions of granting thereof.

New conditions of land plots tender

The decree No. 8 which came into force on May 15, 2016 and amended and added the Decree No. 10 prescribed the procedure of competitive selection of the investor in case there are two and more investors applying for performance of the investment project on the same land plot. According to this document in case in term of 30 calendar days starting from the date of registration of application on conclusion of investment agreement there are other applications regarding the same land plot received by state bodies or executive committee a tender for choice of the investor (investors) shall be made.

The resolution No. 563 established the procedure of such tender. The state body (executive committee) creates tender committee.

The main criteria for assessment of tender offers are the following:

  • Correspondence of investment project to priority type of activity (sphere of economy) for investments;
  • declared amount of investments;
  • terms of performance of investment project;
  • number of work places created;
  • financial and management possibilities of participant of tender and others.

Tender committee decisions are made by an open simple majority vote (from number of attendees). In case of equality of votes the winning side is the one the chairman of the tender voted for.

The resolution of the Council of Ministers of the Republic of Belarus dated 19.07.2016 No. 563
"On measures for implementation of the Decree of the President of the Republic of Belarus dated August 6, 2009 No. 10"

PUBLIC-PRIVATE PARTNERSHIP IS READY TO BE USED

Dmitry Viltovsky
Partner

The Resolution of the Council of Ministers of the Republic of Belarus No. 532 which is adopted in pursuance of the article 40 of the Law "On Public-private Partnership" and came into force on July 27, 2016 has approved:

  • Regulations regarding procedure of preparation, consideration and assessment of offers on projects of the public-private partnership (PPP);
  • Regulations regarding procedure of management and performance of tender for the choice of the private partner for conclusion of public-private partnership agreement;
  • Regulations regarding procedure of keeping in the State register of public-private partnership agreements.

According to Regulation procedure of preparation, consideration and assessment of offers on projects of the public-private partnership public institution "National agency of investments and privatization"" is an authorized body for development of public-private partnership. This body shall carry out complex project assessment of public-private partnership and preparation of the report on expedience of public-private partnership project.

Regulations also govern the following aspects of public-private partnership:

  • drafting offers on projects performance of PPP, their consideration and assessment,
  • decision making on project performance of PPP,
  • development and assessment of the tender documentation,
  • carrying out tender for the choice of the private partner for conclusion of PPP agreement,
  • conclusion of public-private partnership agreement, and also
  • procedure of keeping in the State register of public-private partnership agreements.

The resolution of the Council of Ministers of the Republic of Belarus dated 06.07.2016 No. 532
"On measures for implementation of the Law of the Republic of Belarus dated December 30, 2015
"On public-private partnership"

APPROVAL OF PLANS FOR EXPORT DEVELOPMENT IN 2016-2020 IN BELARUS

The national program of support and development of export in Belarus for 2016- 2020 and also "road map" of actions for its implementation are approved by the Resolution of the Council of Ministers dated August 1, 2016 No. 604.

The purpose of the Program is diversification and increase of export. These objectives will be achieved by means of specific actions planned for this period and include, in total, 181 points. We mention only some of them, distributing in accordance with the priorities established in the Program:

  1. "Optimization of national system of support and development of export": review of current and development of new legal acts regulating issues of support of export; participation of Belarusian producers of goods in the foreign fairs organized during national holiday dates.
  2. "Opening new niches in the perspective markets, maintaining and strengthening current positions in traditional markets": Performance of joint economic programs and projects within the Union State of Belarus and Russia; removal of sanctions of the EU against the Belarusian entities and non-admission of their extensive interpretation; research a question of feasibility of agreement signature about free trade with India, Egypt, Iran.
  3. "Increase of export potential in service trade": expansion of the sphere of rendering construction services by the national specialized companies through participation in foreign infrastructure projects; holding advertising campaigns regarding rendered medical services in the Republic of Belarus.
  4. "Development of economic integration within EEU": removal of barriers, restrictions and withdrawals in trade (first of all concerning energy carriers, assembly plants goods and other sensitive items), participation of Belarusian producers in public procurements within EEU; harmonization of the legislation in the field of intellectual property.
  5. "Increase of favorability of export work, development of export potential of small and medium business": discussing issue of use of instruments of compensation to the producer costs for certification of new products in the foreign markets; creation and maintaining the electronic database "The Newest Developments of Belarus"; extension of number of goods of the Belarusian exporters by means of network distribution of goods produced by small and medium business.
  6. "Development of innovative export by means of increase in export of the knowledge-intensive products and technologies": negotiation with the WTO for the purpose of forming and coordination of the balanced, most favorable conditions of membership in this organization for the Republic of Belarus; study of a possibility of prolongation of validity period of a special legal regime in the High-Tech Park; use of capacity of the Chinese-Belarusian industrial park "The industrial park "Great Stone" as an element of the Economic belt of the Silk way for the purpose of creation of new export-oriented goods.

The resolution of the Council of Ministers of the Republic of Belarus dated August 01, 2016 No. 604
"On support and development of export in the Republic of Belarus in 2016 – 2020"

PROCEDURE OF EMPLOYMENT OF FOREIGNERS IN BELARUS HAS BEEN SPECIFIED

Aleksei Mikhailov
Junior Associate

It is well-known to many our Clients that in order to hire foreign workers in Belarus it is necessary to get at least two permissions of state bodies. However until recently procedure of issuance of these permissions wasn't accurately regulated. This fact significantly complicated process (generally not simple) of receipt of necessary documents. However Regulation "On procedure of issuance of documents authorizing the right for labor activity concerning foreign citizens and stateless persons" (approved by the Resolution of the Ministry of Internal Affairs of the Republic of Belarus dated June 24, 2016 No. 173) entered into force August 16, 2016. We assume this document will facilitate work with state bodies regarding receipt of permissions.

Regulation contains information regarding procedure and terms for applying to state bodies for obtaining permissions. The list of documents state bodies can demand from the applicant is also specified, forms of these documents are established.

Terms for request for extension of permissions (we remind, the legislation establishes a possibility to prolong their validity once): not later than 15 days and not earlier than 2 months prior to the termination of term of validity of permission.

Moreover, together with the Regulation we mentioned one more Regulation came into force (approved by the Resolution of the Ministry of Labor and Social Protection of the Republic of Belarus dated June 28, 2016 No. 30). According to this document, prior to issuance of the mentioned permissions citizenship and migration state bodies shall apply to executive committees for approval or refusal of issuance of mentioned documents. The new Regulation contains closed list of the grounds for refusal in issuance of permissions. For example, it is a salary debt within the last 6 months, failure to provide data on vacancies to labor and employment and social protection committee of the Minsk Executive Committee, refusal in employment of the Belarusian or constantly living foreigner.

We think that these acts will positively influence practice of issuance of permissions related to employment of foreign citizens in the Republic of Belarus.

The Resolution of the Ministry of Internal Affairs of the Republic of Belarus dated June 24, 2016 No. 173
"On procedure of issuance of documents authorizing the right for labor activity concerning foreign
citizens and stateless persons"

The Resolution of the Ministry of Labor and Social Protection of the Republic of Belarus dated June 28, 2016 No. 30
"On Procedure and Terms of Issuance of Reports Regarding Possibility of Involvement of Foreign
Citizens and Persons Without Citizenship and Labor Activity by the Foreign Citizen and a Person
Without Citizenship in the Republic of Belarus"

OPENING OF THE EMBASSY OF THE REPUBLIC OF BELARUS IN THE KINGDOM OF SPAIN

In 2016 the Embassy of the Republic of Belarus in the Kingdom of Spain will be opened. Such decision was approved by the Council of Ministers in the resolution dated August 17, 2016.

It should be noted that countries are in diplomatic relations since February 13, 1992. However earlier Belarusians had to apply Embassy of Belarus in France or Embassy of Russia in Spain.

The Resolution of the Council of Ministers dated 17.08.2016 No. 643
"On opening of Embassy of the Republic of Belarus in the Kingdom of Spain"

LAW FIRM NEWS

The European Bank for Reconstruction and Development (EBRD) is extending a €10 million loan to PP Polesie JLLC (PP Polesie), a leading producer of children's plastic toys in Belarus. Arzinger&Partners' team consulted PP Polesie and our associates Dmitry Viltovsky, Juri Slepitch and Klim Stashevsky were involved in all phases of the project including drafting loan agreement and negotiations. This loan will contribute to export possibilities of PP Polesie and will be regarded as a solid example for other such projects.

Since the start of its operations in Belarus, the EBRD has invested almost €1.8 billion in some 70 projects in various sectors of the country's economy. These investments include €83 million in sustainable energy projects under the Bank's Green Economy Transition approach.

More detailed news can be found here.

* * * * * * * * * *

The Turkish company Anadolu EFES (the 6th on sales amounts in the European market and the 11th in the world) started production of three brands on plants of the largest Belarusian beer producer "Krinitsa". Grades "GoldMineBeer" and "GreenBeer" will be produced in Minsk. Later the made product will be transferred for sale to the Belarusian subsidiary of the Anadolu EFES company.

The license agreement for production of "Gold Barrel" beer has been signed for a long term. "Krinitsa" will provide marketing support and promotion of a brand within the territory of Belarus.

Partners of "Arzinger&Partners" Dmitry Viltovsky and Alexander Korsak and Senior Associate Maxim Slepich represented interests of Anadolu EFES during negotiations with "Krinitsa" and drafted toll agreement. Senior Associate Klim Stashevsky drafted license agreement and coordinated its signing by both parties. Client's wishes and experience of cooperation with breweries worldwide were considered during the deal.

There are several significant players at the Belarusian beer market beer and we are pleased that cooperation of "Arzinger&partners" with Anadolu EFES has led to localization of a part of production in Belarus. Also it means that Belarusian consumers will be offered a great product for reasonable price.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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